LPG traders press BERC for commission hikes

The Bangladesh Energy Regulatory Commission (BERC) is set to hold a public hearing on October 29 on proposals by liquefied petroleum gas (LPG) importers, distributors and retailers to raise their commissions, with importers seeking substantial increases on 12kg cylinders despite repeated concessions from the government and continued price instability in the market.

According to proposals submitted to BERC, importers have sought to raise their commission on a 12kg cylinder from Tk 200 to Tk 478 for Omera, Tk 349 for Petromax, Tk 360 for Delta and Tk 300 for Meghna Group. Distributors have proposed increasing their commission from Tk 50 to Tk 150, while retailers want theirs raised from Tk 45 to Tk 70.

The hearing comes amid strike threats by distributors and retailers. The LPG Gas Traders Cooperative Society had called a strike for October 15 and 16 but withdrew the programme on October 14 following talks with the government. Speculation is rife that the commission increases will take effect in November, while reports have circulated that retailers withdrew the strike after being assured of higher commissions.

The latest demands come after a series of concessions to importers amid the global energy market crisis. These included higher import ceilings for five companies, tax cuts, continued letter of credit (LC) facilities and an increase in shipping charges in February. Despite the concessions, LPG prices remain beyond the government-fixed rates in many parts of the market.

Prices began rising again in the international market in September, triggering fresh instability in domestic supplies. Although BERC raised the price of a 12kg cylinder by Tk 252 to Tk 1,837 in October, it is reportedly selling for Tk 2,200 to Tk 2,500 in the market.

The current dispute reflects a longer struggle over commissions and pricing. On April 12, 2021, when BERC first announced LPG prices, the LPG Operators Association of Bangladesh (LOAB) objected to the Tk 143 commission set for a 12kg cylinder, arguing that it was insufficient to sustain their businesses. Azam J Chowdhury, then LOAB president, threatened to suspend imports.

Five months later, on September 13, 2021, BERC raised the commission from Tk 143 to Tk 186 amid pressure from importers.

The change of government on August 5 did little to curb the influence of major LPG importers. Several companies, including Beximco, Orion and Bashundhara, subsequently stepped back from leading the import business, making way for a handful of players, including Azam J Chowdhury's East Coast Group, Hasan Mahmud Raja's United Group, Energy Pack, Jamuna Spacetech LPG and BM LPG.

A senior BERC official, speaking on condition of anonymity, said importers had pressured the commission to raise shipping charges from $108 to $250 per tonne, even though the earlier rate was already considered high.

"They came and said they would not bring gas unless shipping charges were raised. We told them to bring the gas and submit the invoices, after which the rate could be adjusted. They did not listen and went to the ministry. The ministry said whatever was necessary to ensure supply should be done. We were forced to raise the charges," the official said.

The official added that importers had secured successive concessions, yet consumers continued to pay more than the fixed price.

LOAB President Amirul Islam said the association wanted commissions to be determined through a logical assessment.

Abu Taher Quraishi, organising secretary of the LPG Gas Traders Cooperative Society, said distributors were responsible for delivering cylinders to retailers' doorsteps but often stopped deliveries during supply crises, forcing retailers to bear transportation costs. The society has proposed allowing retailers to handle transportation themselves, he said, arguing that this would reduce their dependence on distributors.